The confusion about whether agency workers are employees may finally have been resolved. In Dacas v Brook Street Bureau, the Court of Appeal ruled that Mrs Dacas was not employed by the agency, and gave a very strong indication that she was employed by the Council.
Unfortunately, she hadn't appealed against the tribunal finding that she wasn't a Council employee, and so the Court could not overturn that decision.
Who was responsible for what?
Mrs Dacas worked exclusively at a mental health hostel as a cleaner from early 1996 to 2000 for the Council. The Council supplied the cleaning materials, equipment and an overall and she worked prescribed hours on a two week set rota.
Brook Street was responsible for discipline, for payments to Mrs Dacas, for the deduction of PAYE and national insurance contributions and for holiday and sick pay.
In April 2001 Mrs Dacas was allegedly rude to a visitor at the hostel, and the Council asked that she be withdrawn from the contract. Brook Street told her that it could not find any other work for her.
Mrs Dacas claimed unfair dismissal against both the Council and Brook Street.
What did the tribunal and the EAT decide?
The tribunal decided that Mrs Dacas was not a Council employee as there was no contract between them and therefore no employment relationship. But neither was she an employee of the agency as there was no contract of service between them.
Mrs Dacas appealed only against the finding that she was not an employee of the agency. The EAT agreed with her that she was an employee of the agency, and Brook Street appealed to the Court of Appeal.
What did the Court of Appeal say?
It agreed with the tribunal that there was no contract of service between Brook Street and Mrs Dacas. Brook Street was under no obligation to provide her with work, and she was under no obligation to accept it. Nor did it exercise any relevant day to day control over her or her work.
The fact that Brook Street paid her did not make it the employer. The role of Brook Street was that of an agency finding suitable work assignments for her.
Instead, it was the Council that exercised control over her day to day work, and which supplied her with the clothing and materials she needed for her work. It was under an obligation to pay for the work that she did, and she was under an obligation to do what she was told and to attend punctually at stated times. And it was the Council that brought the arrangement to an end.
Although the obligations and the power to dismiss were not contained in an express contract between Mrs Dacas and the Council, it said that did not prevent them from being read across the triangular arrangements into an implied contract and taking effect as implied mutual obligations as between Mrs Dacas and the Council.
The Court could not, however, substitute a finding that Wandsworth was the employer because Mrs Dacas had not appealed that aspect of the tribunal's decision.
Are things clearer now?
However, the court has given a clear steer that there has to be an employer - Sedley L J commented that to conclude otherwise is 'simply not credible' and 'defies common sense.' In this case, it was the Council. Mummery LJ also accepted that, in general, it would be surprising if the end user did not have the powers of control that would make it the employer.
The third judge, however, dissented, saying that a crucial element of the contract of employment was missing - mutuality of obligation - between the applicant and the Council.
So although things may not exactly be crystal clear, the Court is certainly indicating that there may well be an implied contract between the agency worker and the end user, making the end user the employer in a 'temp' scenario.